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The New DoD SystemsAcquisition Process

Improved performance (including quality) at lower cost.

KEY FOCUS AREAS

l Deliver advanced technology to warfighters faster

Ô Rapid acquisition with demonstrated technology

Ô Full system demonstration before commitment to production

l Reduce total ownership costs and improve affordability

Ô Cost as a requirement that drives design, procurement, and support

Ô Increased competition

l Deploy interoperable and supportable systems

Ô Interoperability demonstrated prior to production

Ô Integration of acquisition and logistics

Ô Improved software management

PROBLEMS WITH 1996 POLICY

l Only addresses systems acquisition - not total acquisitionsystem

l Treats evolutionary approaches and innovations as “non-traditional” excursions

l Endorses “tailoring” but provides no amplifying guidance toassist acquisition strategy development

l Provides no firm decision criteria

Our current process and practices:

• Take too long and cost too much

• Are incompatible with modern technology cycles

Deliver Advanced Technology Faster

New Model

l Technology opportunity and mission need present - before enteringacquisition process

l Multiple process paths - not just one way of entering systemsacquisition and commercial products allow later entry

l Evolutionary acquisition - based on time-phased requirements -preferred (but not only) approach

l Technology development separated from systems integration -achieve proven technology before beginning systems-level work atMilestone B

l “LRIP” more important Departmental commitment - than “Full Rate”

l “Entrance criteria” met -- before entering next phase

l Operations, Support, and Disposal - part of acquisition process

IOC

The 5000 Model

BA

Single Step orEvolution to Full

Capability

Concept &Technology

Development

System Development& Demonstration

Production &Deployment

Pre-SystemsAcquisition

Systems Acquisition(Engineering and Manufacturing

Development, Demonstration, LRIP &Production)

Operations &

Support

C

Technology Opportunities &User Needs

Sustainment

l Process entry at Milestones A, B,or C (or within phases)

l “Entrance criteria” met before

entering phase

Relationship to Requirements Process

MNS ORD

All validated byRequirements Authority

FRPDecisionReview

BLOCK 2

BLOCK 3

FOC

IOT&E

Deliver Advanced Technology Faster (con’t)

Test and Evaluation

l Test & Evaluation will be integrated throughout theacquisition process - early, up-front involvement of T&Ecommunity in requirements process and design of anintegrated test strategy and early operational assessments

l Adapt T&E approaches for Evolutionary developments

l Test & Evaluation is conducted for two purposes-discovery during system development and confirmationof system performance after development

Deliver Advanced Technology Faster (con’t)

Funding

l Full Funding for system no later than Milestone B -earlier if a follow-on system

l Transition funding - to support later entry into theacquisit ion process

l Funding sized to buy - at Milestone C

Reduce Total Ownership Costs and ImproveAffordability

Total Ownership Cost

l Use market research and commercial products -- toincrease competit ion

l Use Open Systems Architecture - to reduce cost oftechnology insertions

l Use Dissimilar Competition - non-head-to-headalternatives to meet capabil ity need

l Increase use of Simulation Based Acquisition - toreduce costs for hardware prototype

l Reprocurement reform -- based on business caseanalysis of predicted life, tech insertion opportunities,and cost reduction potential

Reprocurement Reform Opportunities

LogisticsReadiness/Cost of Ownership

Predicted Life

Acq

uisi

tion/

Per

form

ance

Bas

ed O

ppor

tuni

ties

HIGH

LOW

Acquisition DLS/Tech Insertion

• Consumables• Electronic parts and components• Computer systems• Peripherals/software

• C3I, Avionics• High tech/cost systems• Engines, transmissions, radios, radars• High interoperability• High ROI• High DMS risk

• Commodities and consumables• Fuel• Clothing

• Skins and hulls•Warships/carriers• Air frames• Dumb weapons• Cannon tubes

High P

ayoff

Oppor

tunities!!

Reduce Total Ownership Costs and ImproveAffordability (con’t)

Affordability

l Value addressed - in the ORD by user

l Minimum number of m ission-oriented KeyPerformance Parameters - to facilitate cost-performance trades

l Affordability analysis -- at each milestone decisionpoint

Deploy Interoperable and Supportable Systems

Interoperability

l Interoperability requirements identified as KeyPerformance Parameters (KPP)

l Use of a C4I Support Plan to discuss how to meetInteroperability KPP

l “System-of-systems” management approachl Capstone Requirements Documents

l MDAs & Testers wil l ensure thorough understanding of cri t icalsystem interfaces and f low of consistent/rel iable data/ informationbetween systems in the batt lef ield

l Mutual understanding of key systems in a mission area

Deploy Interoperable and Supportable Systems(con’t)

Supportability

l Total life-cycle view, including operations, support,and disposal

l Increased emphasis on human factors andmanpower

l Emphasis on reliability built into design

l Requirement for supportability to be addressed inacquisition strategy

Deploy Interoperable and Supportable Systems(con’t)Software

•Requirement for use of a capability maturity assessment - achievelevel 3 or PM must approve risk mitigation plan and schedule

•Emphasis on evolutionary (or “spiral”) development

•Recognition that software development may not use the samemodel as hardware development

•Recognition that software must be mature before deployment -once maturity proven, software baselined and methodical andsynchronized deployment plan implemented

•Requirement for registration and Clinger-Cohen compliance

IMPLEMENTATION CHALLENGES

l Getting agreement on terminology

l Employing new product support strategies

l Accepting a militarily useful capability early, based on demonstratedtechnology, and obtaining objective capability when technology matures

l Ensuring adequate funding, funding alignment, and “transition funding”

l Integrating the test and evaluation community into the new acquisitionapproach

l Ensuring that the workforce (including industry) is adequately trained tosuccessfully implement the new approach

l Assuring Congress that the new approach will maintain their visibility intoDoD programs and continue their ability to verify DoD’s accountability forprogram success

THE FUTURE OF REFORM

“…[T]he U.S. defense establishment“…[T]he U.S. defense establishmentmust be transformed to address our newmust be transformed to address our newcircumstance. The need to swiftlycircumstance. The need to swiftlyintroduce new weapons systems isintroduce new weapons systems isclear.”clear.”

-- Secretary of Defense -- Secretary of Defense RumsfeldRumsfeld(confirmation testimony, January 11, 2001)(confirmation testimony, January 11, 2001)

FOR ADDITIONAL INFORMATION

l http:/ /www.acq.osd .mil/ar/ar.htm

l http:/ /www.acq.osd .mil/ara /

l http:/ /www.web2.deskbook.osd .mil/default.asp

Backup Slides

Summary of Findings:Summary of Findings:Where do Opportunities Exist?Where do Opportunities Exist?

LogisticsReadiness/Cost of Ownership

Predicted Life

Acq

uisi

tion/

Per

form

ance

Bas

ed O

ppor

tuni

ties

HIGH

LOW

Acquisition DLS/Tech Insertion

• Consumables• Electronic parts and components• Computer systems• Peripherals/software

• C3I, Avionics• High tech/cost systems• Engines, transmissions, radios, radars• High interoperability• High ROI• High DMS risk

• Commodities and consumables• Fuel• Clothing

• Skins and hulls•Warships/carriers• Air frames• Dumb weapons• Cannon tubes

High P

ayoff

Oppor

tunities!!

SystemIntegration

SystemDemo

System Development & Demonstration

Review Review

ProductionReadiness & LRIP Support

ConceptExploration

ComponentAdvanced

Development

Concept & Tech Development

Review

Rate Production &Deployment

Production & Deployment

Example 1

A B C

Need some materiel solution toattack space-based warheads

-- Multiple Concepts to explore

-- Technologies immature

-- No ORD

Concept Exploration -- look at paper studies of alternative ways of attack

Component Advanced Development -- mature component technologies

System Integration -- development integration of components to meet systemrequirements

System Demo -- demonstrate product maturity through simulation and test

LRIP -- mature manufacturing capability and operationally test

Full-Rate -- produce system in quantity

Support -- sustain system

Enter at MS A

SystemIntegration

SystemDemo


Review Review


ConceptExploration

ComponentAdvanced

Development


Review



Example 2

A B C

Need new airplane transport tocarry heavy and bulking cargo

-- Concept/architecture in place

-- Mature technology

-- ORD and Full-Funding

System Integration -- development integration of components to meet systemrequirements

System Demo -- demonstrate product maturity through simulation and test

LRIP -- mature manufacturing capability and operationally test



Enter at MS B

SystemIntegration

SystemDemo


Review Review


ConceptExploration

ComponentAdvanced

Development


Review



Example 3

A B C

Tracking system to keep visibilityof issue items

-- Item available withoutdevelopment

-- ORD and Full-Funding

LRIP -- operational test to make sure that it works in our environment



Enter at MS C

Program Definition&

Risk Reduction

ConceptExploration

Engineering &ManufacturingDevelopment

(EMD) *

Production,Fielding/

Deployment

MS 0 MS I MS II MS III

C

SystemIntegration

SystemDemo

Risk Reduction & Demonstration

A

Review Review


ConceptExploration

ComponentAdvanced

Development


Review



Model Comparisons

CURRENT

NEW

B

OLD VS. NEW SYSTEMOLD VS. NEW SYSTEM

OLD NEWØMilestones 0, I, II, III Milestones A (Analysis), B (Begin

Development), C (Commitment)

ØDAB/DAE/SAE Reviews DAB/DAE/SAE Reviews Decision/Interim Progress Reviews

ØSingle Entry Point Multiple Entry Points

(other entry points “non-traditional”) (other entry points part of system)

ØRequirements (MNS/ORD)_ Requirements (MNS/Time-Phased ORD)

ØFull Funding Required at PDRR Full Funding Required at System Development (or before if platform replacement)

ØCongressional Visibility, Accountability, SAME Flexibility/OSD & Service Responsibilities

Visibility, Accountability, Flexibility oversight mechanismsØNo Change in Congress’s current control over funds,especially for reprogramming and new starts

ØNo Change in major oversight and reporting mechanisms(SAR’s, detailed budget justifications, Beyond LRIP Report)

Outyear FundingØFull funding at System Development (or earlier) vice Program

Definition and Risk Reduction

ØDoD commitment still maintained in FYDP

Getting the Most out of DemonstrationsØFirm Exit Criteria and Well Defined Deliverables Now Required

CONGRESSIONAL ISSUES

Adequate FundingØNeed more funding for demonstrations and experiments

ØFunding available for technology risk

Funding AlignmentØFinancial Management Regulation needs to be updated to matchfunding “colors” with work in each phase

Transition FundingØFunding source for programs entering at later milestones

FINANCIAL ISSUES

STATUTORY & REGULATORY CHANGES

l Changes to conform current statutes to new milestone names

and phases (e.g., 10 USC 2366, 2399, 2400, 2434, 2435)

l Changes to align statutory requirements with work content (e.g.,

10 USC 2399, 2434) - DOT&E and CAIG support

l Changes in Financial Management Regulation to recognize new

milestone names and phases

No Substantive Changes to Current Law

The new approach will require:

SystemIntegration

SystemDemo


Review Review


ConceptExploration

ComponentAdvanced

Development


Review



CONCEPT OVERVIEW

A B C

Programs can enter the processat various points depending on

concept and technology maturity

The Following Slides PresentThe Following Slides PresentHypothetical System ExamplesHypothetical System Examples

“Phase A” - Work Content

l Paper studies of alternative concepts formeeting a mission

l Exit criteria: Specific concept to be pursued &technology exists.

Concept Exploration Component Advanced Developmentl Development of subsystems/components that must be

demonstrated before integration into a systeml Concept/tech demonstration of new system conceptsl Exit criteria: System architecture & technology maturity

ComponentAdvancedDevelopment

ConceptExploration

Review

“Phase A” - Examples

Joint Maritime Command & control Capabilityl A command platform for the Joint Tactical Forces Commanderl Need to explore various concepts

Hard & Deeply Buried Target Capabilityl Need to penetrate buried targetl No specific system concept

Advanced Narrowband Systeml Global narrowband communication system composed of multiples

segmentsl Need to explore various concepts

Enter at Concept Exploration Enter at Component Advanced DevelopmentAirborne Laserl Airplane Concept, but laser technology not yet maturel Component work on laser before integration into plane.

JASTl Airplane Concept but working on technologies used in plane

DD21 -- 21st Century Destroyerl Ship Concept but component level technology not yet mature.l Propulsion system, weapon and radar systems in development

ConceptExploration

ComponentAdvancedDevelopment

ConceptExploration

Review

l System Integration of demonstrated subsystems andcomponents

l Reduction of integration riskl Exit criteria: System demonstration in a relevant

environment (e., first flight)

System Integration System Demonstrationl Complete developmentl Demonstrate engineering development modelsl Combined DT/OT testingl Exit criteria: System demonstration in an

operational environment

SystemDemonstration

SystemIntegration

Review

“Phase B” - Work Content

F16 Upgradel Upgrade to existing planel System architecture in place (mud -fighter)l Mature technology; work focused on integration

Joint Direct Attack Ammunition (JDAM)l Strap-on guidance kit to enhance accuracyl System architecture in place (kit on dumb bomb)l Work focused on integrating kit with smart bomb and reducing risk

CVN 77l Construction of new Nimitz-class carrier incorporating lessons learned from

previous versions

Enter at System IntegrationEnter at System DemonstrationFast Sea Lift Shipsl Commercial ships modified to meet military needs

Joint Primary Aircraft Training Systeml Brazilian model selectedl Work focused on integration of subsystemsl (ejection seats) and demonstration

Global Hawk Transitionl UAV program previously an ACTDl Work focused on upgrading tested system to meet ORDl Flight test demonstrations continuing

SystemDemonstration

SystemIntegration

Review

“Phase B” - Examples

l IOT&E, LFT&E of production-representative articles

l Establish manufacturing capability

l Execute low-rate production

l Exit criterion: Favorable Beyond-LRIP Report

Rate Production& Deployment

ProductionReadiness & LRIP

Review

“Phase C” - Work Content

Production Readiness & LRIP

l Execute full rate production

l Deploy system

Rate Production & Deployment

Non-Development Airlift Aircraftl Procurement of modified commercial Boeing 747l IOT&E needed to move beyond LRIP

C-9l Procurement of DC-9 aircraftl IOT&E needed to move beyond LRIP

Administrative Use Vehicles:l Buy commercial vehicles for use at post/camps/stations

Enter at Milestone C

“Phase C” - Examples

Rate Production& Deployment

ProductionReadiness & LRIP

Review

Cost Estimating> New documents reviewed by CAIG

> DoD 5000.4-M still applicable (but needs to be updated)

> No change in cost estimating process proposed

Outyear FundingØFull funding at System Development (or earlier) vice Program

Definition and Risk Reduction

ØDoD commitment still maintained in FYDP

IMPLICATIONS FOR THE COST COMMUNITY